{"id":46258,"date":"2023-04-12T17:53:36","date_gmt":"2023-04-12T13:53:36","guid":{"rendered":"https:\/\/magpie.ae\/staging4\/?p=46258"},"modified":"2023-04-12T18:11:29","modified_gmt":"2023-04-12T14:11:29","slug":"art-sales-in-2023-continued-growth-but-a-mixed-picture-overall","status":"publish","type":"post","link":"https:\/\/magpie.ae\/staging4\/art-sales-in-2023-continued-growth-but-a-mixed-picture-overall\/","title":{"rendered":"Art sales in 2023: continued growth, but a mixed picture overall"},"content":{"rendered":"
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The seventh edition of The Art Basel and UBS Global Art Market Report has just arrived, still credited to Clare McAndrew, doyen of arts market economists, and still providing the most comprehensive macroeconomic analysis of the state of the global art market in the year under review. The merits of a data-driven approach can be overstated, but it\u2019s the only way to get a snapshot of how the art sales industry is doing \u2013 and indeed how it\u2019s doing relative to the wider economy.<\/strong><\/p>\n\n\n\n

On the latter point, the IMF has just forecast that the total GDP of \u2018advanced economies\u2019 in 2022 grew 2.7 percent on the year before (and will contract to 1.3 percent in 2023). The Art Market Report says the art business did better than that in 2022 \u2013 a 3 percent increase, to nearly $68 billion. (Total global GDP increased 3.4 percent in 2022, according to the IMF, but that includes a lot of territories that are growing from a low base plus several that aren\u2019t traditionally covered by art market figures).<\/p>\n\n\n\n

The key takeaways:<\/strong><\/span><\/div>\n\n\n\n

Overall sales were up.<\/mark><\/strong> Global art sales continued on an upward trajectory with 2022 seeing a 3 percent increase. At $67.8 billion, the market has finally topped its 2019 pre-pandemic levels. <\/p>\n\n\n\n

But the news isn\u2019t all good; performance varied considerably across different sectors, regions, and price segments \u2013 high-end sales did particularly well, for instance, but the overall growth was more muted than anticipated. The year began with a lot of optimism, but then the reality began to bite \u2013 the war in Ukraine, increasing inflation rates, supply chain issues, recessions in key markets, the Chinese anti-Covid measures. \u201cIn the last quarter particularly,\u201d says the Report, \u201cthe market appeared overstimulated and began to cool, with reports of more subdued bidding and buying at events \u2026\u201d. <\/p>\n\n\n\n

As a result, the total volume of sales transactions in the year managed only a bare 1 <\/meta>percent growth.<\/p>\n\n\n\n

The States still leads.<\/strong><\/mark> The US retained its leading position in the global art market with its share of sales by value increasing 2<\/meta> <\/meta>percent year-on-year to 45 <\/meta>percent. In fact among geographical markets the US has seen the most robust recovery from the pandemic, with sales growing 8<\/meta> <\/meta>percent year-on-year to hit a record $30.2 billion. The big gains were in high-end auction sales and moderate growth in dealer sales. The UK overtook China to move back into the second place with 18<\/meta> <\/meta>percent of sales, thanks to a modest (and just about inflation-beating) year-on-year rise of 5<\/meta> <\/meta>percent. That took UK sales to $11.9 billion, still below their pre-pandemic level in 2019 of $12.2 billion.<\/p>\n\n\n\n

Big dealers did well.<\/mark><\/strong> Dealer sales reached an estimated $37.2 billion in 2022, a 7 <\/meta>percent year-on-year increase that restored the market to its value before the pandemic in 2019. But the largest increases in average sales (19 <\/meta>percent up) came from the bigger dealers, those turnovers above $10 million; smaller dealers struggled, especially the smallest \u2013 sales for those with turnover of less than $250,000 reported a 3 <\/meta>percent decline in sales.<\/p>\n\n\n\n

Bad news for the smaller dealers.<\/mark><\/strong> The growing costs of the art business also put clouted profits for dealers \u2013 some said shipping costs in particular had risen cripplingly, others pointed to increasing cost for participation in art fairs (\u201cthey don\u2019t bring in enough business to justify the high cost of a booth\u201d, said one dealer), and economic stringency plus direct-from-artist sales has meant an (anecdotal) decline in the number of purchases at the lower end. Inevitably it\u2019s the smaller dealers who will feel the pinch.<\/p>\n\n\n\n

There\u2019s might be more room for more artists.<\/mark> <\/strong>In 2022, dealers reported that sales from their single highest-selling artist on average made up 31<\/meta> <\/meta>percent of their total revenues, and their top three artists accounted for 51<\/meta> <\/meta>percent. But this skewed distribution has improved of late; back in 2018, the average dealer\u2019s top three contributed 63<\/meta> <\/meta>percent<\/meta> of sales.<\/p>\n\n\n\n

Auction sales were patchy.<\/mark><\/strong> Some spectacular records were set in 2022\u2019s auction rooms, but in fact total sales (both public and private) are estimated at $30.6 billion \u2013 down 2<\/meta> <\/meta>percent from the previous year, but still 11<\/meta> <\/meta>percent up on pre-pandemic 2019.<\/p>\n\n\n\n

The NFT boom has subsided.<\/mark> <\/strong>\u201cThe frenzy of activity surrounding art-related NFTs fell significantly in 2022\u201d says the report; sales on NFT platforms outside the art market fell by nearly half to just under $1.5 billion, and overall sales of art-related NFTs seem to be losing their lustre \u2013 only 8<\/meta> <\/meta>percent of sales activity on the Ethereum network in 2022, against 24<\/meta> <\/meta>percent in 2020. (Incidentally, the Art Market Report includes a good, authoritative overview of legal issues for NFT owners and sellers.)<\/p>\n\n\n\n

Online sales fell back too.<\/mark><\/strong> Events like art fairs are back to a more normal schedule, so dealers and auction houses both reported further drops in the value of their online sales \u2013 to just $11 billion in 2022, a 17<\/meta> <\/meta>percent decline from the year-before peak of $13.3 billion (though still 85<\/meta> <\/meta>percent higher than in 2019).<\/p>\n\n\n\n

Art Fairs are back.<\/mark><\/strong> Galleries reported that on average they exhibited at the same number of fairs in 2022 as they had in 2019, and sales there rose significantly from 27<\/meta> <\/meta>percent of total dealers\u2019 sales in 2021 to 35<\/meta> <\/meta>percent in 2022 \u2013 still below pre-pandemic levels, though.<\/p>\n\n\n\n

So what\u2019s the outlook?<\/strong><\/span><\/div>\n\n\n\n

The report says dealers are bullish \u2013 45<\/meta> <\/meta>percent expect better sales this year, and one in ten is predicting a significant improvement. It\u2019s the smaller dealers (turnover less than $250,000 pa) who are the most optimistic, with just over half (52<\/meta> <\/meta>percent) expecting an increase in sales this year. They\u2019re the ones who saw aggregate sales decline in 2022.<\/p>\n\n\n\n

The big collectors seem confident too; of the HNW collectors polled, 77 <\/meta>percent are positive about the outlook for the global art market; and a majority of them (55<\/meta> <\/meta>percent) are planning to buy art in 2023.<\/p>\n\n\n

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The global economic situation remains muddy, however. Clearly, the continuing slowdowns will have a pronounced effect on advanced economies \u2013 the IMF is forecasting growth of just 1.3 <\/meta>percent here in 2023. On the other hand the reopening of the Chinese economy should provide a significant short-term boost, and the IMF says \u2018Emerging Market and Developing Economies\u2019 \u2013 mainly China, India and Saudi Arabia \u2013 will outpace global growth (a 3.9 <\/meta>percent increase in 2023 versus 2.8 <\/meta>percent for the world in total). <\/p>\n\n\n\n

\u201cThese varying contexts for art sales, both regionally and over different wealth levels, are likely to protect the market\u2019s downside when measuring aggregate sales,\u201d concludes Dr McAndrew (right). She also feels that legal and regulatory issues \u2013 transparency, money-laundering, restitution and more \u2013 could affect the international art trade going forward. <\/p>\n\n\n\n

As one dealer says in the report: \u201cWe have seen a resurgence of investment schemes and the use of inappropriate financial tools in the art market again in the last two years. When these things start to proliferate, it\u2019s always a sign of trouble ahead.\u201d<\/p>\n\n\n\n

The Art Basel and UBS Art Market Report 2023 is available as a free download here<\/a>.<\/strong><\/span><\/div>\n\n\n\n
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